BRITISH VIRGIN ISLANDS

BRITISH VIRGIN ISLANDS

BRITISH VIRGIN ISLANDS British Virgin Islands (BVI) is a British dependency located in the Caribbean. BVI is one of the most popular offshore jurisdictions for company formation. The company law system is based on British law but with great flexibility in terms of filing requirements. International Business Companies (IBCs) registered in BVI are private limited companies offering the Zero tax base (no tax on profits). History and Government The British Virgin Islands is a British protected territory and a member of the British Commonwealth of Nations. It became selfgoverning in 1967 and has a democratically elected Legislative Council comprising the Governor, the Attorney General and four Ministers drawn from the Legislative Council. Legal System The legal system is based on the English Common Law. The judiciary are appointed by the Territorial Government. The ultimate appellate court is the Privy Council in London. Geography The British Virgin Islands is a group of more than forty islands situated in the Caribbean approximately sixty miles east of Puerto Rico. It is one hour ahead of United States Eastern Standard time and is connected by numerous daily flights to San Juan in Puerto Rico. San Juan is an international junction with direct flights to the United States, South America and Europe.

CHARACTERISTICS OF A BRITISH VIRGIN ISLANDS IBC Governing corporate legislation The BVI Business Company Act 2004, (the ACT ) as amended Time-scale for incorporation and availability of ready-made companies Usually 48-72 hours are needed and ready made companies are generally available The regulations governing availability of names The words Limited, Corporation, Incorporated, Societe anonime, Sociedad anonima or the abbreviation Ltd., Corp, Inc, or SA must be a part of the name of every company incorporated under the Act. No company shall be incorporated under the Act with a name that is identical to a company already in existence or which closely resembles an existing name. Words such as Assurance, Bank, Building Society, Royal, Trustee Company etc. will require justification. Documents filed on incorporation Memorandum and Articles of Association Are details of the beneficial owners disclosed Not on public record BRITISH VIRGIN ISLANDS Minimum and maximum number of shareholders A company may be formed without shareholders although at least one shareholder will be required upon commencement of business. There is no maximum number of shareholders provided by the Act. Standard authorized capital Companies are normally incorporated with $50,000 to qualify for the lowest annual license fee of $350. Classes of share capital Share capital may be divided into different classes. No par values shares may be issued as may redeemable shares, bearer shares, etc. If bearer shares are issued they must be held by an authorised custodian. Denomination of share capital Share capital may be denominated in any recognized hard currency.

Capital taxes None Residency requirements on shareholders or shareholders meetings There are no residency requirements on shareholders or their meetings. Information published relating to shareholders The company must keep a share register at the registered office address. This is available for inspection by the members. There is an optional register of members maintained by the Registrar of Companies. Minimum and maximum number of directors A company may be registered without directors. However the 1st Director must be appointed within 6 months of incorporation. Sole directors are allowed and there is no statutory maximum although the articles may impose a limit. Corporate directors are permitted and there are no nationality or residency requirements. Nature of the power of directors The directors have all the power of the company that are not reserved to the members under the Act or in the memorandum and articles. Conclusion of contract on behalf of the company A contract required to be executed in writing and under seal may be entered into by or on behalf of the company in writing under the common seal of the company. A contract required by law to be in writing and signed by the parties may be entered into by or on behalf of the company in writing and signed by a person acting under the express or implied authority of the company. Appointment and removal of directors The first directors are elected by the subscribers to the memorandum and thereafter the directors are elected by the members. Where permitted by the memorandum and articles the directors may also elect directors for such term as the director may determine. A director may be removed from office by resolution of members or by resolution of directors. Director meetings The directors may meet at such times and in such manner and places within or outside the BVI as the directors may determine to be necessary or desirable. Telephone and other electronic meetings are permissible. Information published relating to directors You can register both the Register of Members and Directors on public record if you so elect. Must accounts be prepared by the directors? A company incorporated under the Act shall keep such accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the company. The accounts do not have to be audited or filed with the financial authorities of BVI. Must the company have a registered presence in the territory of incorporation? Yes. A BVI IBC must have at all times a registered office and a registered agent in the BVI.

What records must be maintained in the territory and are they available for public inspection? A share register and an imprint of the common seal of the company must be maintained at the registered office of the company. Other records such as minutes of meetings of directors, members and copies of all resolutions may be kept at such places as the directors determine. These are not available for public inspection. What are the limits placed on the company s borrowing powers? None. There are no debt / equity ratios under the law. Is there a register of company charges? A company may maintain at its registered office a register of mortgages, charges and other encumbrances. Similarly, a public register may be maintained at the option of the company. Company seal A company incorporated under the Act shall have a common seal. Procedure for authentication of documents and contracts A document requiring authentication or attestation by a company incorporated under the Act may be signed by a director, secretary or an authorized officer or agent of the company and need not be under its common seal. If the signature of any director, officer or agent authenticating or attesting any document is verified in writing by the registered agent of the company, the company is bound by the document. Limitation on company to contract The capacity of a company to contract is limited by the doctrine of ultra vires. Doctrine of ultra vire applies to a corporate body, so that any act done by the body which is beyond its capacity to act will be considered invalid. Third party protection The directors, officers and agents of an IBC are required to act honestly and in good faith and to exercise the care, diligence and skill of a reasonably prudent person. No provisions in the Memorandum or Articles or the Act relieve a director, officer or agent of the company from the duty act in accordance with the Memorandum or Articles or from any liability arising from his management of the business and affairs of the company. BRITISH VIRGIN ISLANDS Service of writs Effected at the company s registered office.

Information required to register a British Virgin Islands IBC 1. Certified copy of the passport of each beneficial owner by either a lawyer or a notary public or a bank. 2. Bank reference for each beneficial owner or a professional reference letter by a lawyer or an accountant. 3. A recent copy of utility bill (not more than 6 moths old water or electricity bill) that verifies home address of each beneficial owner 4. Personal details: Full name; Address business and private; Nationality; Occupation; Telephone and telefax numbers (private, home and mobile); E-mail. Corporate Documents The corporate documents that are delivered to the shareholders of a British Virgin Islands IBC are as follows: Certificate of Incorporation; Memorandum and Articles of Association; A certified copy of the resolution appointing the first Director; A certified copy of the first minutes of the Board of Directors; Share certificates; Company s seal.